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How to monetize my app 1

How to monetize my app?

The day has come, finally your app is ready. This magic moment when everything is possible but still, behind all the confidence, there is just a little bit of doubt. The one that forces you to ask yourself how will it generate revenue when the top charts in App Store and Google Play are occupied by free apps.

Let’s have a look at options that are avaible, I will describe here solutions to current market situation, where users are expecting free app but you need to recoup your expenses and of course gain profit.

Advertising and in-app purchases are the way to make money after you’ve decided to make your app free. However, it takes a lot more than just puting ads or paid premium options, it’s not as simple as that. You need to understand what revenue-generating choices you have, what your market and competitors are exactly and finally you need to process this data into right paid user experience. Then you will be able to choose your app monetization strategy.

What are your app monetization options?

Luckily, there are some when your app is free. In-app purchases and advertising help breaking the barrier of price tag . Choice between them is directly connected to the type of your app and users.

In-app purchases

The most common example of this approach can be found in games. Free version of app that offers paid, optional features. ‘Too bad! Wanna extra live? Here you go! That will be 0.50$’ – consumables.

Second type of in-app purchases can be found outside gaming world, e.g. Apple Music. Once you’ve paid and used that purchase, it will remain avaible to use.

Let’s not forget about ‘freemium‘ – free app with paid component, such as new feature. There are couple of ways to approach freemium app such as: reduced features or allowing all the features initially and then blocking them.

In-app advertising

Here revenue is generated based on traditional advertising models . Size, placement and positions varies. Ads pay differently for impressions, click-throughs, country that user is from and the format. Dynamic tend to be more attractive.

User growth is the key

Really, whatever you choose from options described above, this is what matters: there is only a handful of users that will ever help you generate revenue from your app. Grow large active user base and it will turn this handful into significant revenue.

There are some handy metrics which you should get familiar with and use. Without them it will be a struggle to make your minority of users generate actual revenue.

Who are your users and what is the market?

Good, old-fashioned research. Examine your competitors, you won’t get exact numbers but you will be able to identify their strategy. Once you’ve familiarized yourself with their apps you will be able to ask crucial question – what are they missing ? And this is when you strike hard. You will be able to adjust your monetization strategy or even more: turn your app into better product.

Users though are much more important than your competitors. Because a handful of users will ever pay for something in your app or tap an ad, it’s absolutely fundamental to know what triggers it. Tendencies and demographics will come to rescue here. Note that it’s risky with in-app purchases – you need to find balance between value from your free app and desire for paid extras.

Less is more

Mobile users know what they want, they are sophisticated. Be intrusive with ads and they will find something else, more elegant. In order to actually generate some revenue, your app needs to give them value first.

Advertising strategy will depend on purpose of your app and your audience.

The key is to make your users feel like ads are natural part of app, hence the placement and timing should be properly adjust. By that I mean ad during loading of next level/video rather than in the middle of it, we’ve all been there.

It’s also important that your in-app purchases are intuitive, quick, in harmony with user experience.


Define your business goals, purpose of your app, your users and market – then you will be able to choose monetization strategy for your app. Keep an eye on metrics, track data. Once you’ve gathered some of it and your assumptions were proven to be correct, try to innovate. Adjust and adapt and you will be able to find perfect monetization strategy for your app.

Have an idea for a web or mobile app, but don’t know where to start?
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